No written agreement has ever existed between Polaris and RESD, see id. ¶ 12, but RESD alleges that the parties established the terms of an enforceable sales contract through their course of dealing, see id. ¶ 15. RESD contends that, under the parties' usual arrangement, RESD would deposit half of the price of a turbine at the time it placed an order. Id. Polaris would then begin manufacturing the turbine. RESD would eventually pay the balance owed on the turbine, and Polaris would promise to deliver the completed turbine within 45 days. Id. ¶ 22. RESD claims that it long ago paid in full for a number of turbines, but, notwithstanding the parties' course of dealing and Polaris's promise to deliver turbines within 45 days, those turbines have still not been delivered to RESD's customers. Id. ¶ 23.

This matter is before the Court on RESD's motion for a preliminary injunction. ECF No. 30. RESD asks the Court to enjoin Polaris and Filos "from physically delivering or transferring title to any wind turbines pending the determination of RESD's priority rights under the Uniform Commercial Code." Id. at 1. In other words, RESD asks the Court to prohibit Polaris from selling or delivering any turbine to any customer until the Court can adjudicate whether and to what extent RESD has priority rights to Polaris-manufactured turbines. The Court denies RESD's motion for the reasons described below.

A. Standard of Review

In determining whether to grant a motion for a preliminary injunction, the Court considers four factors: (1) the movant's likelihood of success on the merits; (2) the threat of irreparable harm to the movant if the injunction is not granted; (3) the balance between this harm and the harm that the other parties will suffer if the injunction is granted; and (4) the public interest. Dataphase Sys., Inc. v. C L Sys., Inc., 640 F.2d 109, 114 (8th Cir. 1981). Preliminary injunctions are extraordinary remedies, and the party seeking a preliminary injunction bears the burden of establishing its entitlement to such relief under the Dataphase factors. Watkins Inc. v. Lewis, 346 F.3d 841, 844 (8th Cir. 2003).

B. Likelihood of Success on the Merits

RESD bases its motion for a preliminary injunction on three claims: breach of contract, conversion, and fraud. The strongest of RESD's claims is its breach-of-contract claim. For the reasons explained on the record at the hearing on RESD's preliminary-injunction motion, the Court concludes that RESD is likely to succeed on at least some aspects of that claim. RESD is far less likely to succeed on its conversion and fraud claims, but the Court need not discuss those claims because the preliminary relief sought by RESD and the analysis of the remaining Dataphase factors is identical for each of RESD's claims.

C. Threat of Irreparable Harm

RESD argues that it will be irreparably harmed in three ways if Polaris is not enjoined from selling or delivering turbines to any customer until RESD's priority rights are fully adjudicated. First, RESD claims that Polaris's failure to deliver the turbines to RESD's customers is irreparably damaging RESD's goodwill and reputation. Second, RESD claims that Polaris is on the brink of insolvency and that, without preliminary relief, RESD may find itself without an effective remedy for any breach by Polaris. And third, RESD claims that it has priority rights to the turbines that Polaris has manufactured and that remain in Polaris's possession, and that, in the absence of an injunction, Polaris might sell "RESD's" turbines to someone else and thus defeat RESD's priority rights. None of these contentions is availing.

First, RESD will not suffer irreparable harm to its goodwill or reputation in the absence of an injunction because there is no evidence that enjoining Polaris from selling turbines to any of its customers will result in RESD's customers getting their turbines delivered more quickly; indeed, as discussed below, the most likely result of such an injunction would be to put Polaris out of business, which would leave RESD's customers empty-handed. Moreover, there is no evidence that RESD has any goodwill or reputation left to protect. The State of Minnesota has filed suit against RESD alleging that it defrauded its customers by (among other things) misrepresenting the availability of government grants for wind turbines and the projected income from installing such turbines - actions that have nothing to do with Polaris's failure to deliver turbines on time. See ECF No. 39-1. These allegations of fraud have received widespread publicity and, based on these allegations, a Minnesota court has enjoined RESD from soliciting new customers. See ECF No. 39-2. In other words, RESD's reputation has already been severely tarnished and will remain severely tarnished whether or not the Court enters the injunction that RESD seeks. And even if enjoining Polaris somehow would salvage some small part of RESD's reputation, that would mean little, as RESD recently filed for bankruptcy under Chapter 7 of the Bankruptcy Code.[1] See ECF No. 45.

Second, even if it is true that Polaris is on the brink of insolvency (a claim that Polaris denies), it is unclear how enjoining Polaris from conducting business would prevent irreparable harm to RESD. In fact, just the opposite is likely to be true. If Polaris is as close to insolvency as RESD claims, then an injunction prohibiting Polaris from conducting business may be the straw that breaks the camel's back. As long as Polaris remains in business - that is, as long as Polaris can solicit new customers and generate cash to build new turbines - there is at least some chance that Polaris will eventually be able to deliver turbines to RESD's customers. If the Court enjoins Polaris from doing ...

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